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United Nations Development Programme (UNDP)

A capability centred approach to environmental sustainability:
Is productive employment the missing link between micro- and macro policies?


Enrique Delamonica
Policy Analyst, Division for Policy and Planning, UNICEF, New York

Santosh Mehrotra
Regional Economic Adviser, Poverty and Governance, Regional Centre for Asia at Bangkok, UNDP

United Nations Development Programme (UNDP) - International Poverty Centre

Working Paper number 13 - April 2006

SARPN acknowledges the International Poverty Centre as the source of this document - www.undp.org/povertycentre
[Download complete version - 221Kb ~ 1 min (27 pages)]     [ Share with a friend  ]

Abstract

The emphasis on growth has led to an under-emphasis of the micro-impacts of macroeconomic policies. Whether growth reduces income-poverty is crucially dependent on its impact on employment. This paper addresses the question: what kind of productive employment can an economy generate that fulfils three objectives: one, personal fulfilment; two, value added; and three, restores the organic link between humans and nature. Growth policies that do not fulfil these criteria fail the test for human capability enhancement with environmental sustainability. Policies which recognize a dual synergy framework like the paper proposes, and which have been demonstrated to fulfil these objectives are described and discussed for specific countries/sectors.

A paper for a book: Sustainable Human Development and the Capability Approach, to be edited by Enrica Chiappero Martinetti (Department of Economics, University of Pavia, Italy) & Anantha K. Duraiappah (International Institute for Sustainable Development, Canada).

Introduction

A basic premise of the Capability Approach is that focusing development analysis and policy on increasing income and material wealth is misguided. Although almost every person would like to enjoy higher income, one’s standard of living is also determined by access to basic social services (which provide the means to expand capabilities and functionings), and the health and sustainability of the environment (which also affect wealth and functionings). Often raising per capita income is insufficient or unnecessary (or both) to ensure the expansion of capabilities. In the first part of this paper, a brief discussion of the interactive relationship (synergy) between income growth and the expansion of capabilities is presented. This leads to a set of recommendations which explicitly integrate economic and social policies and which are associated in the economics literature with different heterodox approaches (Post-Keynesian, Evolutionary, Structuralism, and Transformational Growth).

Moreover, the path of the growth of consumption patterns and the development of the productive capacity pursued by now industrialized countries is not an option for developing countries from an environmental point of view. This is the essential imperative for making development sustainable, i.e. development based on consumption, distribution and production paths which are different from the ones experienced in the past. However, the literature on sustainable development seldom incorporates the elements of the synergy mentioned above.

The core of the paper (section 2) deals with the interaction between the environment and this economic-social synergy. A crucial element in this interaction is employment generation, i.e. generation of particular kinds of employment to ensure both environmental sustainability and increasing value added in the production chain. This leads to higher income on the one hand, but also the protection of nature so future generations of humans can survive. However, humans today need to survive and be able to engage in the economic activities (i.e. work) they want to value. This is the capability of finding productive employment – this is especially important in labour-surplus economies. Such work would be not only valuable in a personal sense, but also in the sense of reversing the vicious cycle of poverty-population increase and environmental degradation,, which is particularly acute in some parts of the world (e.g. in parts of Sub-Saharan Africa and South Asia). Too often, in macro-economic policy analyses and in the advice from international financial institutions, this micro-macro link between growth and employment is missing. Moreover, partly as a result of this, they apply a “one size fits all” approach, as though macro-economic policies for, say a labour surplus economy, or one with low population density might be similar. So the question this paper addresses is: what kind of productive employment can an economy generate that fulfils three objectives: one, personal fulfilment; two, value added to the economy; and three, restores the organic link between humans and nature.

The third section of the paper describes some policies which might contribute to this sustainable human development path. Concrete experiences as well as a description of the institutional mechanisms which exist in various countries with very different labour endowments (e.g. India, Brazil) are also presented. The final section summarises the argument.



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